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MICROFINANCE REVOLUTION: ITS EFFECTS, INNOVATIONS, AND CHALLENGES
Author(s) -
KONO Hisaki,
TAKAHASHI Kazushi
Publication year - 2010
Publication title -
the developing economies
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.305
H-Index - 30
eISSN - 1746-1049
pISSN - 0012-1533
DOI - 10.1111/j.1746-1049.2010.00098.x
Subject(s) - microfinance , financial services , business , microinsurance , developing country , scale (ratio) , economics , political science , economic growth , finance , geography , cartography
“Microfinance revolution” is the term often applied to the successful expansion of small‐scale financial services to the poor with high repayment records in developing countries. The present paper investigates the extent to which the microfinance revolution is truly revolutionary. More specifically, it explores the impact of microfinance institutions on the poor, the mechanisms underlying high repayment rates and their innovations, and the new challenges microfinance institutions are currently facing. Different from the existing published survey literature, we focus on current topics and attempt to show recent theoretical developments in a comprehensive manner using simplified models with very similar settings. We contend that microfinance is developing in a promising direction but has yet to reach its full potential.